Expensify Card interchange grew to $3.5
million, Operating cash flow was $3.5 million and Free cash flow
was $5.2 million.
Expensify, Inc. (Nasdaq: EXFY), a payments superapp that helps
individuals and businesses around the world simplify the way they
manage money across expenses, corporate cards and bills, today
released a letter to shareholders from Founder and CEO David
Barrett alongside results for its quarter ended March 31, 2024.
A Message From Our
Founder
Q1'24 was a great start to the year. We are back to strong
Operating cash flow and Free cash flow profitability, producing our
best quarterly Free cash flow since Q1 of last year, and we are
also increasing our full-year guidance.
Though seasonally soft in terms of revenue, interchange from the
Expensify Card continued growing by leaps and bounds: up 13% month
on month in March alone. Additionally, while some existing
customers did shed internal employees (thereby reducing our active
seat count), our strong margins continue to fortify our cash
position to help us ride out these near term headwinds.
Next, we announced our highly anticipated corporate travel
service, which already has a sizable backlog of interest and will
be cross sold through our existing account manager and sales teams.
Expensify Travel is designed to scale up to the very top of the
market, and is the most commonly requested feature from our
midmarket and enterprise customers.
Finally — and most exciting of all — we have made outstanding
progress in developing New Expensify. Not only have we executed
some extremely delicate back-end upgrades with minimal downtime,
but we have completed the core pieces of the "critical viral path".
This is the uniquely Expensify "superapp experience" that we
believe will enable us to seamlessly convert viral consumer signups
into highly qualified SMB leads in the "untapped 99%" of the
market, that then grow into reliable midmarket profit centers.
I couldn't be more proud of our product development team in
crossing this key watershed, enabling us to move past core feature
development to focus on rock solid stability, glassy-smooth
performance, and highly optimized conversion flows.
It's been a long journey. But by this time next quarter, New
Expensify and Expensify Travel are both expected to be producing
new incremental revenue, as well as helping retain and expand
existing customers for years to come. It takes a lot of work to
make something look this simple, and I can't wait to show you on
the earnings call (or visit exfy.com/roadmap to see it
yourself)!
-david Founder and CEO of Expensify
First Quarter 2024 Highlights
Financial:
- Revenue was $33.5 million, a decrease of 16% compared to the
same period last year.
- Generated $3.5 million cash from operating activities.
- Free cash flow was $5.2 million.
- Net loss was $3.8 million, compared to $5.9 million for the
same period last year.
- Non-GAAP net income was $3.7 million.
- Adjusted EBITDA was $7.1 million.
- Interchange derived from the Expensify Card grew to $3.5
million, an increase of 57% compared to the same period last
year.
Impact of Cost Cutting Measures
- As referenced previously, the company underwent aggressive cost
cutting midway through the quarter ended December 31, 2023, with
the full impact realized for the duration of the quarter ended
March 31, 2024, as summarized below:
- Generated $3.5 million cash from operating activities, an
improvement of $4.0 million, or 739%, quarter over quarter.
- Free cash flow was $5.2 million, an improvement of $8.8
million, or 242%, quarter over quarter.
- Net loss was $3.8 million, an improvement of $3.4 million, or
48%, quarter over quarter.
- Non-GAAP net income was $3.7 million, an improvement of $0.3
million, or 10%, quarter over quarter.
- Adjusted EBITDA was $7.1 million, an improvement of $1.3
million, or 22%, quarter over quarter.
- Free Cash Flow Guidance: See Financial Outlook section
for updated Free cash flow guidance for fiscal year ending December
31, 2024.
Business:
- Paid members – Paid members were 688,000, a
decrease of 8% from the same period last year.
- Expense tracking – The company added
enterprise-grade receipt scanning and distance tracking to New
Expensify to capture emerging SMBs at their earliest stages and
provide an upgrade path for future growth.
- Expense splitting – The company launched consumer
group expense splitting in New Expensify, which combines
Venmo-style payments and Splitwise-style settlements in a
WhatsApp-style chat.
- Corporate travel – Rolling out to customers in
waves, the company has begun onboarding its waitlist of customers
to its new global travel offering, Expensify Travel, including a
top accounting, finance, and HR firm for startups, Escalon
Services. To jump the line and get access earlier, join the
waitlist at use.expensify.com/travel.
- Invoicing – The company launched invoicing on its
next-gen platform, New Expensify, designed to boost bottom-up
adoption and increase market share among sole proprietors and other
growing VSBs.
- Updated Expensify Card Program – Launched a new card
program which provides more interchange per transaction and applies
to all new cards issued subsequent to launch. Under the new
program, interchange is recognized as revenue.
Financial Outlook
Expensify's outlook statements are based on current estimates,
expectations and assumptions and are not a guarantee of future
performance. The following statements are forward-looking and
actual results could differ materially depending on market
conditions and the factors set forth under “Forward-Looking
Statements” below. There can be no assurance that the Company will
achieve the results expressed by this guidance.
Free Cash Flow
Expensify estimates Free cash flow of $11.0 million to $13.0
million for the fiscal year ending December 31, 2024.
The Company does not provide a reconciliation for free cash flow
estimates on a forward-looking basis because it is unable, without
making unreasonable efforts, to provide a meaningful or reasonably
accurate calculation or estimation of net cash provided by
operating activities and certain reconciling items on a
forward-looking basis, which could be significant to the Company's
results.
Stock Based Compensation
An estimate of expected stock-based compensation for the next
four fiscal quarters is as follows, which is driven primarily by
the pre-IPO grant of RSUs issued to all employees (which vest
quarterly over eight years with approximately five years
remaining).
Est. stock-based compensation
(millions)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Low
High
Low
High
Low
High
Low
High
Cost of revenue, net
$
2.8
$
3.5
$
2.7
$
3.4
$
2.6
$
3.3
$
2.4
$
3.1
Research and development
2.9
3.6
2.9
3.6
2.8
3.5
2.5
3.2
General and administrative
1.7
2.1
1.6
2.0
1.6
2.0
1.4
1.8
Sales and marketing
0.5
0.7
0.5
0.7
0.5
0.7
0.5
0.7
Total
$
7.9
$
9.9
$
7.7
$
9.7
$
7.5
$
9.5
$
6.8
$
8.8
Availability of Information on
Expensify’s Website
Investors and others should note that Expensify routinely
announces material information to investors and the marketplace
using SEC filings, press releases, public conference calls,
webcasts and the Expensify Investor Relations website at
https://ir.expensify.com. While not all of the information that the
Company posts to its Investor Relations website is of a material
nature, some information could be deemed to be material.
Accordingly, the Company encourages investors, the media and others
interested in Expensify to review the information that it shares on
its Investor Relations website.
Conference Call
Expensify will host a video call to discuss the financial
results and business highlights at 2:00 p.m. Pacific Time today. An
investor presentation and the video call information is available
on Expensify’s Investor Relations website at
https://ir.expensify.com. A replay of the call will be available on
the site for three months.
Non-GAAP Financial
Measures
In addition to financial measures prepared in accordance with
U.S. generally accepted accounting principles (“GAAP”), we provide
certain non-GAAP financial measures, including adjusted EBITDA,
non-GAAP net income, and free cash flow.
We believe our non-GAAP financial measures are useful in
evaluating our business, measuring our performance, identifying
trends affecting our business, formulating business plans and
making strategic decisions. Accordingly, we believe that these
non-GAAP financial measures provide useful information to investors
and others in understanding and evaluating our results of
operations in the same manner as our management team. These
non-GAAP financial measures are presented for supplemental
informational purposes only, should not be considered a substitute
for financial information presented in accordance with GAAP, and
may be different from similarly titled metrics or measures
presented by other companies. Non-GAAP financial measures have
limitations as analytical tools and should not be considered in
isolation or as substitutes for financial information presented
under GAAP. There are a number of limitations related to the use of
non-GAAP financial measures versus comparable financial measures
determined under GAAP. For example, other companies in our industry
may calculate these non-GAAP financial measures differently or may
use other measures to evaluate their performance. All of these
limitations could reduce the usefulness of these non-GAAP financial
measures as analytical tools. Investors are encouraged to review
the related GAAP financial measures and the reconciliations of
these non-GAAP financial measures to their most directly comparable
GAAP financial measures and to not rely on any single financial
measure to evaluate our business. A reconciliation of each non-GAAP
financial measure to the most directly comparable financial measure
stated in accordance with GAAP is at the end of this press
release.
Adjusted EBITDA. We define adjusted EBITDA as net loss
from operations excluding provision for income taxes, interest and
other expenses, net, depreciation and amortization, and stock-based
compensation.
Non-GAAP net income. We define non-GAAP net income as net
loss from operations excluding stock-based compensation.
Free cash flow. We define Free cash flow as net cash
provided by operating activities excluding changes in settlement
assets and settlement liabilities, which represent funds held for
customers and customer funds in transit, respectively, reduced by
the purchases of property and equipment and software development
costs.
The tables at the end of the Condensed Consolidated Financial
Statements provide reconciliations to the most directly comparable
GAAP financial measure to each of these non-GAAP financial
measures.
Forward-Looking
Statements
Forward-looking statements in this press release, or made during
the earnings call, which are not historical facts, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1955. These statements include
statements regarding our strategy, future financial condition,
future operations, future cash flow, projected costs, prospects,
plans, objectives of management and expected market growth, product
developments and their potential impact and our stock-based
compensation estimates and involve known and unknown risks that are
difficult to predict. As a result, our actual results, performance
or achievements may differ materially from those expressed or
implied by these forward-looking statements. In some cases, you can
identify forward-looking statements because they contain words such
as “may,” “will,” “shall,” “should,” “expects,” “plans,”
“anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential,”
“goal,” “ambition,” “objective,” “seeks,” “outlook,” or “continue”
or the negative of these words or other similar terms or
expressions that concern our expectations, strategy, plans, or
intentions. Such forward-looking statements are necessarily based
upon estimates and assumptions that, while considered reasonable by
us and our management, are inherently uncertain. Factors that may
cause actual results to differ materially from current expectations
include, but are not limited to: our expectations regarding our
financial performance and future operating performance; our ability
to attract and retain members, expand usage of our platform, sell
subscriptions to our platform and convert individuals and
organizations into paying customers; the timing and success of new
features, integrations, capabilities and enhancements by us, or by
competitors to their products, or any other changes in the
competitive landscape of our market; the amount and timing of
operating expenses and capital expenditures that we may incur to
maintain and expand our business and operations to remain
competitive; the sufficiency of our cash, cash equivalents and
investments to meet our liquidity needs; our ability to make
required payments under and to comply with the various requirements
of our current and future indebtedness; our cash flows, the
prevailing stock prices, general economic and market conditions and
other considerations that could affect the specific timing, price
and size of repurchases under our stock repurchase program or our
ability to fund any stock repurchases; geopolitical tensions,
including the war in Ukraine and the conflict in Israel, Gaza and
surrounding areas; the impact on inflation on us and our members;
our borrowing costs have and may continue to increase as a result
of increases in interest rates; our ability to effectively manage
our exposure to fluctuations in foreign currency exchange rates;
the expenses associated with being a public company; the size of
our addressable markets, market share and market trends;
anticipated trends, developments and challenges in our industry,
business and the highly competitive markets in which we operate;
our expectations regarding our income tax liabilities and the
adequacy of our reserves; our ability to effectively manage our
growth and expand our infrastructure and maintain our corporate
culture; our ability to identify, recruit and retain skilled
personnel, including key members of senior management; the safety,
affordability and convenience of our platform and our offerings;
our ability to successfully defend litigation brought against us;
our ability to successfully identify, manage and integrate any
existing and potential acquisitions of businesses, talent,
technologies or intellectual property; general economic conditions
in either domestic or international markets; our protections
against security breaches, technical difficulties, or interruptions
to our platform; our ability to maintain, protect and enhance our
intellectual property; and other risks discussed in our filings
with the SEC. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the cautionary statements set forth above. We caution
you not to place undue reliance on any forward-looking statements,
which are made only as of the date of this press release. We do not
undertake or assume any obligation to update publicly any of these
forward-looking statements to reflect actual results, new
information or future events, changes in assumptions or changes in
other factors affecting forward-looking statements, except to the
extent required by applicable law. If we update one or more
forward-looking statements, no inference should be drawn that we
will make additional updates with respect to those or other
forward-looking statements.
About Expensify
Expensify is a payments superapp that helps individuals and
businesses around the world simplify the way they manage money.
More than 12 million people use Expensify's free features, which
include corporate cards, expense tracking, next-day reimbursement,
invoicing, bill pay, and travel booking in one app. All free.
Whether you own a small business, manage a team, or close the books
for your clients, Expensify makes it easy so you have more time to
focus on what really matters.
Expensify, Inc.
Condensed Consolidated Balance
Sheets
(unaudited, in thousands, except
share data)
As of March 31,
As of December 31,
2024
2023
Assets
Cash and cash equivalents
$
49,340
$
47,510
Accounts receivable, net
13,557
13,834
Settlement assets, net
48,513
39,261
Prepaid expenses
4,379
5,649
Other current assets
27,399
30,978
Total current assets
143,188
137,232
Capitalized software, net
15,107
12,494
Property and equipment, net
14,138
14,372
Lease right-of-use assets
5,954
6,435
Deferred tax assets, net
466
457
Other assets
5,918
5,794
Total assets
$
184,771
$
176,784
Liabilities and stockholders'
equity
Accounts payable
$
1,373
$
1,425
Accrued expenses and other liabilities
10,326
9,390
Borrowings under line of credit
15,000
15,000
Current portion of long-term debt, net of
original issue discount and debt issuance costs
7,624
7,655
Lease liabilities, current
436
432
Settlement liabilities
35,560
33,990
Total current liabilities
70,319
67,892
Lease liabilities, non-current
6,155
6,467
Other liabilities
1,787
1,681
Total liabilities
78,261
76,040
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.0001;
10,000,000 shares of preferred stock authorized as of March 31,
2024 and December 31, 2023; no shares of preferred stock issued and
outstanding as of March 31, 2024 and December 31, 2023
—
—
Common stock, par value $0.0001;
1,000,000,000 shares of Class A common stock authorized as of March
31, 2024 and December 31, 2023; 71,755,477 and 70,569,815 shares of
Class A common stock issued and outstanding as of March 31, 2024
and December 31, 2023, respectively; 24,994,705 and 24,994,989
shares of LT10 common stock authorized as of March 31, 2024 and
December 31, 2023, respectively; 7,333,335 and 7,333,619 shares of
LT10 common stock issued and outstanding as of March 31, 2024 and
December 31, 2023, respectively; 24,969,634 and 24,998,941 shares
of LT50 common stock authorized as of March 31, 2024 and December
31, 2023, respectively; 7,395,695 and 7,321,894 shares of LT50
common stock issued and outstanding as of March 31, 2024 and
December 31, 2023, respectively
9
8
Additional paid-in capital
251,055
241,509
Accumulated deficit
(144,554
)
(140,773
)
Total stockholders' equity
106,510
100,744
Total liabilities and stockholders'
equity
$
184,771
$
176,784
Expensify, Inc.
Condensed Consolidated
Statements of Operations
(unaudited, in thousands, except
share and per share data)
Three Months Ended March
31,
2024
2023
Revenue
$
33,535
$
40,101
Cost of revenue, net (1)
14,584
15,775
Gross margin
18,951
24,326
Operating expenses:
Research and development (1)
5,929
5,418
General and administrative (1)
11,431
12,429
Sales and marketing (1)
3,384
9,183
Total operating expenses
20,744
27,030
Loss from operations
(1,793
)
(2,704
)
Interest and other expenses, net
(954
)
(1,416
)
Loss before income taxes
(2,747
)
(4,120
)
Provision for income taxes
(1,034
)
(1,825
)
Net loss
$
(3,781
)
$
(5,945
)
Net loss per share:
Basic and diluted
$
(0.04
)
$
(0.07
)
Weighted average shares of common stock
used to compute net loss per share:
Basic and diluted
85,141,411
81,768,429
(1
)
Includes stock-based compensation expense
as follows:
Three Months Ended March
31,
2024
2023
Cost of revenue, net
$
2,932
$
3,306
Research and development
2,749
2,206
General and administrative
1,703
2,644
Sales and marketing
140
1,848
Total stock-based compensation expense
$
7,524
$
10,004
Expensify, Inc.
Condensed Consolidated
Statements of Cash Flows
(unaudited, in thousands)
Three Months Ended March
31,
2024
2023
Cash flows from operating activities:
Net loss
$
(3,781
)
$
(5,945
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
1,423
1,413
Reduction of operating lease right-of-use
assets
136
181
Loss on impairment, receivables and sale
or disposal of equipment
337
146
Stock-based compensation expense
7,524
10,004
Amortization of original issue discount
and debt issuance costs
11
11
Deferred tax assets
(9
)
(30
)
Changes in assets and liabilities:
Accounts receivable, net
139
707
Settlement assets, net
(6,120
)
(2,683
)
Prepaid expenses
1,270
1,414
Other current assets
171
406
Other assets
(124
)
8
Accounts payable
(260
)
944
Accrued expenses and other liabilities
1,044
1,947
Operating lease liabilities
34
(206
)
Settlement liabilities
1,570
(738
)
Other liabilities
106
63
Net cash provided by operating
activities
3,471
7,642
Cash flows from investing activities:
Purchases of property and equipment
—
(28
)
Software development costs
(2,829
)
(870
)
Net cash used in investing activities
(2,829
)
(898
)
Cash flows from financing activities:
Principal payments of finance leases
(31
)
(201
)
Principal payments of outstanding debt
(37
)
(150
)
Payments for debt issuance costs
(8
)
—
Repurchases of early exercised stock
options
(32
)
(7
)
Proceeds from common stock purchased under
Matching Plan
914
1,099
Proceeds from issuance of common stock on
exercise of stock options
39
66
Payments for employee taxes withheld from
stock-based awards
—
(666
)
Net cash provided by financing
activities
845
141
Net increase in cash and cash equivalents
and restricted cash
1,487
6,885
Cash and cash equivalents and restricted
cash, beginning of period
96,658
147,710
Cash and cash equivalents and restricted
cash, end of period
$
98,145
$
154,595
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
454
$
1,409
Cash paid for income taxes
$
1,164
$
351
Noncash investing and financing items:
Stock-based compensation capitalized as
software development costs
$
915
$
657
Purchases of property and equipment and
capitalized software in accounts payable and accrued expenses
$
223
$
—
Right-of-use assets acquired through
operating leases
$
—
$
145
Reconciliation of cash and cash
equivalents and restricted cash to the Condensed Consolidated
Balance Sheets
Cash and cash equivalents
$
49,340
$
111,232
Restricted cash included in other current
assets
24,267
19,013
Restricted cash included in settlement
assets, net
24,538
24,350
Total cash, cash equivalents and
restricted cash
$
98,145
$
154,595
Expensify, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(unaudited, in thousands, except
percentages)
Adjusted EBITDA and Adjusted EBITDA
Margin
Three Months Ended March
31,
Three Months Ended
December 31,
2024
2023
2023
Net loss
$
(3,781
)
$
(5,945
)
$
(7,204
)
Net loss margin
(11
)%
(15
)%
(20
)%
Add:
Provision for income taxes
1,034
1,825
1,049
Interest and other expenses, net
954
1,416
169
Depreciation and amortization
1,383
1,413
1,240
Stock-based compensation
7,524
10,004
10,600
Adjusted EBITDA
$
7,114
$
8,713
$
5,854
Adjusted EBITDA margin
21
%
22
%
17
%
Non-GAAP Net Income and Non-GAAP Net
Income Margin
Three Months Ended March
31,
Three Months Ended
December 31,
2024
2023
2023
Net loss
$
(3,781
)
$
(5,945
)
$
(7,204
)
Net loss margin
(11
)%
(15
)%
(20
)%
Add:
Stock-based compensation
7,524
10,004
10,600
Non-GAAP net income
$
3,743
$
4,059
$
3,396
Non-GAAP net income margin
11
%
10
%
10
%
Adjusted Operating Cash Flow and Free Cash
Flow
Three Months Ended March
31,
Three Months Ended
December 31,
2024
2023
2023
Net cash provided by (used in) operating
activities
$
3,471
$
7,642
$
(543
)
Operating cash flow margin
10
%
19
%
(2
)%
(Increase) decrease in changes in assets
and liabilities:
Settlement assets
6,120
2,683
(2,983
)
Settlement liabilities
(1,570
)
738
2,343
Adjusted operating cash flow
8,021
11,063
(1,183
)
Less:.
Purchases of property and equipment
—
(28
)
(281
)
Software development costs
(2,829
)
(870
)
(2,180
)
Free cash flow
$
5,192
$
10,165
$
(3,644
)
Free cash flow margin
15
%
25
%
(10
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509106134/en/
Investor Relations Contact Nick Tooker
investors@expensify.com
Press Contact James Dean press@expensify.com
Expensify (NASDAQ:EXFY)
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Expensify (NASDAQ:EXFY)
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